It’s an extremely bullish start to the day for Polkadot (DOT) with its price strengthening by almost 9% over the past 24 hours, making the most of the bullish sentiment in the wider crypto market. At the time of writing, DOT/USD is trading around $16.
One of the reasons for the uptrend is the positive mood in the cryptocurrencies market and the recent gains in Bitcoin in early trading on Tuesday. Despite the news about the clampdown on crypto mining across China and the UK’s recent decision to ban leading crypto exchange Binance’s operations, BTC is getting ready to test the key $35,000 level once again, improving the market sentiment towards other cryptocurrencies as well.
Gains in DOT are on the higher side in comparison to other cryptocurrencies over promising developments related to parachain auctions. Two weeks after the first round of parachain slot auctions on Polkadot’s canary network Kusama, numerous crowdloan projects have gone on to raise more than $200 million in KSM tokens, indicating high levels of interest for the parachains that allow for interoperability among different blockchain networks.
The uptrend in Polkadot aligns with our previous forecast for this digital asset, which envisions greater highs for its value due to the several use cases it offers beyond being transactional. The open-source project offers higher levels of scalability, lower transaction costs, and of course, the promise of interoperability, which DeFi market leader Ethereum currently lacks, giving it a significant edge over its competition and playing a key role in driving up interest in DOT among investors in the near future.
Key Levels to Watch
On the H4 price chart of DOT/USD, while the larger timeframe moving averages indicate a bearish bias, the smaller MAs as well as leading technical indicators MACD and momentum are signaling a bullish bias. The price is sitting right at the pivot point at the moment, making it an interesting time.
A move upwards would see buyers test resistance at $19 and then again at $24 as they try to take Polkadot’s price above the key $30 level. However, a reversal of the market sentiment in the wider crypto sector could see DOT head below the pivot and test support at $11. A breakdown of this level can send the price below the $10 level towards support at around $8.